Rent increase question

Diddums · 9 Oct 2023 at 16:25

Got this email on Friday from our letting agent:

Dear Diddums,
As you may know, your rent anniversary is annually 06th February. As per your agreement terms, rent will be reviewed on each anniversary and as you have not had any rent reviews over the last two years, your landlord has asked us to review it now for December onwards.

As you may have heard, the lettings market has changed dramatically and if we were to go to market now the property would be achieving aprox £2050.00 per month for rent. The landlord is asking for an increase to £1950pcm from the current £1550.00, commencing 06th Drecember 2023. We appreciate that this is big jump in rent, but I’m sure you agree the current rent you have been paying since 2021 is unfortunately well below current market value, for some time now.

Please do let me know if this is something you can agree to and if you wish to proceed with the tenancy or if you prefer to find alternative accommodation perhaps that will be more affordable for you as we appreciate this is a significant increase.

Im here for any queries of course, but please do let me know by Friday next week if possible if you can proceed.

Thank you

The rent increase clause in our tenancy agreement states:

. 6. Rent Increase.
6.1. The Landlord can increase the Rent every twelve months on the anniversary of the date
on which the Tenancy began (“the Rent Increase Date”). For the avoidance of doubt this
means that the Rent may increase on 06th February each year. The increase is to be
calculated according to the rise in the Retail Prices Index from the start of the Tenancy or
the anniversary date whichever is the latter. To avoid doubt if the Landlord does not
increase the rent in any year this will not affect the Landlord’s rights to increase the Rent
in subsequent years.

Now from my understanding there are a few options here. First is agree and pay the higher rent from December onwards (lol).

Second is disagree and the landlord can begin the eviction process.

Third is disagree and they have to wait until the renewal.

So hive mind, what's the legality here?

Cheers

VincentHanna · 9 Oct 2023 at 16:29

If he can evict you fairly easily and make an extra £4800 a year I guess why wouldn't he? As **** as that is. 25 renters go for every property that comes up so he can easily replace you.

Lots of buy to let owners with mortgages would have been caught out when the interest rates went up last year (if they were due to renew) so it doesn't surprise me they need more to cover it

Your location says London - What type of property is it that he could get £2050 a month for? I assume it's just a flat or small house?

Diddums · 9 Oct 2023 at 16:34

VincentHanna said:
If he can evict you fairly easily and make an extra £4800 a year I guess why wouldn't he? As **** as that is. 25 renters go for every property that comes up so he can easily replace you.

Lots of buy to let owners with mortgages would have been caught out when the interest rates went up last year (if they were due to renew) so it doesn't surprise me they need more to cover it

Your location says London - What type of property is it that he could get £2050 a month for? I assume it's just a flat or small house?

Yeah I'm not arguing that, we kindasorta wanted to move anyway so this was the kick we needed, but my question is whether or not he can implement this from December, two months early.

Just sorting out our timescales really.

It's a 2bed flat in Putney. No garden, no garage, one crap bathroom, great location.

PermaChanged · 9 Oct 2023 at 16:37

. 6. Rent Increase.
6.1. The Landlord can increase the Rent every twelve months on the anniversary of the date
on which the Tenancy began (“the Rent Increase Date”). For the avoidance of doubt this
means that the Rent may increase on 06th February each year. The increase is to be
calculated according to the rise in the Retail Prices Index from the start of the Tenancy or
the anniversary date whichever is the latter. To avoid doubt if the Landlord does not
increase the rent in any year this will not affect the Landlord’s rights to increase the Rent
in subsequent years.

The latter date is surely February 2022, the anniversary date - RPI since then is 17.614% if online calculators are to be trusted - £1,550 should come out to £1,823.02?

Semple · 9 Oct 2023 at 16:38

Not sure on the legality, but I'd be querying the increase happening before the 6th February - what's the point having a date if they can start the increase 2 months early. The market might drop by February at which time they could recalculate a lower amount.

Rich43 · 9 Oct 2023 at 16:39

You could save £1000+ by moving out of London but then you would have high travel expenses.

fez · 9 Oct 2023 at 16:42

Sounds like he is perhaps pushing his luck on the amount that he can charge. Not by much but still. Did you tenancy start in December?

GreatAuk · 9 Oct 2023 at 16:43

IANAL, but I would read this as an informal 'take this deal or we'll evict you and get some new higher-paying tenants type thing'.

I imagine they've set the increase in December so that if you don't pay the higher amount they've got time to start the eviction process or start an RPI based rent increase review depending on their preference.

So I don't think they have a legal right to increase the rent in December based on that tenancy clause, but you can work out what will happen if you disagree.

Uther · 9 Oct 2023 at 16:48

They want you out so they can charge an even higher rent.

tom_e · 9 Oct 2023 at 16:48

Takes a few months for them to be able to evict anyway so if you really wanted to be a pain you could just refuse and then stay there until next year.

https://www.citizensadvice.org.uk/w...fault notice before,give you 6 months' notice. Notice period depends on type of contract.

delta0 · 9 Oct 2023 at 16:48

They are entering into a negotiation with you so come back to them with an offer. Do some fact checking on the current rental market for the area.

Freefaller · 9 Oct 2023 at 16:50

That seems like quite a rise - I guess his mortgage is renewing and he needs to cover the payments?

Allnamestaken · 9 Oct 2023 at 16:52

Freefaller said:
That seems like quite a rise - I guess his mortgage is renewing and he needs to cover the payments?

Guess he needs a bailout for his “business” he’s “running”. Businesses usually have to eat losses to some degree in hard times lol, if ur a landlord you just pass down your ridiculous interest rate increase to your tenants lol.

Haze · 9 Oct 2023 at 16:56

delta0 said:
They are entering into a negotiation with you so come back to them with an offer. Do some fact checking on the current rental market for the area.

This... You are meant to be able to negotiate rent increases, check out what else is to rent in your area

GreatAuk · 9 Oct 2023 at 16:57

Allnamestaken said:
Guess he needs a bailout for his “business” he’s “running”. Businesses usually have to eat losses to some degree in hard times lol, if ur a landlord you just pass down your ridiculous interest rate increase to your tenants lol.

Thing is it's not really 'hard times' for landlords. Slightly more choppy conditions than usual due to changes in the law and interest rate increases, but overall for the landlords that can make it work conditions are quite ok. Sheer number of prospective tenants and lack of available rental properties means they can ask for huge amounts and people will pay up.

There would be no need to take a loss in any case - if they were unable to increase rents then they could just sell the property and take the capital gains...

BUDFORCE · 9 Oct 2023 at 16:57

Sign of the times, I dunno what the world is coming to.

I really feel for you, but I suspect there isn't much you can do about it.

Freefaller · 9 Oct 2023 at 16:59

Allnamestaken said:
Guess he needs a bailout for his “business” he’s “running”. Businesses usually have to eat losses to some degree in hard times lol, if ur a landlord you just pass down your ridiculous interest rate increase to your tenants lol.

I never have they've always been way under market rates to a) keep the tenants we've got, b) the tenants tend to look after your place if you're not trying to rip them off c) I feel it's my duty to offer sensible rents to give people a nice home for a sensible price. As I said in another thread, no increases for over 5 years from us.

Allnamestaken · 9 Oct 2023 at 17:01

Freefaller said:
I never have they've always been way under market rates to a) keep the tenants we've got, b) the tenants tend to look after your place if you're not trying to rip them off c) I feel it's my duty to offer sensible rents to give people a nice home for a sensible price. As I said in another thread, no increases for over 5 years from us.

I am of much the same mind.

Would hate the idea of revolving door of tenants every few years due to lack of affordability and honestly most people can’t afford rates like we’re seeing in a lot of cities now.

Freefaller · 9 Oct 2023 at 17:02

Allnamestaken said:
I am of much the same mind.

Would hate the idea of revolving door of tenants every few years due to lack of affordability and honestly most people can’t afford rates like we’re seeing in a lot of cities now.

Ultimately for me it's not a short term gain thing, it's a long term retirement plan - or something to pass onto the kids. I'm also not naturally greedy - I like to be fair and lean towards being kind.

BUDFORCE · 9 Oct 2023 at 17:08

I do see it from a landlords point of view as well. Because of the affordability method of BTL mortgages (based off rental) and the stress testing that goes into it, you might find they are due to come off a fixed rate and cannot remortgage without putting the rent up.

So they either squeeze you, or have to pay potentially much higher mortgage on standard variable rate.

It's just a mess at the moment.